In economic history, what was the primary effect of the 1929 Wall Street stock market crash on global trade?
Answer and explanation
Correct answer: D. collapse of credit and rise of protectionism
- Step 1: The 1929 crash triggered the Great Depression, precipitating international bank failures and credit contraction. Nations reacted by enacting retaliatory protectionist trade tariffs (such as the US Smoot-Hawley Tariff), which caused world trade volume to collapse by two-thirds. Answer: collapse of credit and rise of protectionism. Why not the others: "unprecedented boom in luxury shipping" contradicts economic history; shipping and commercial maritime trade plummeted during the depression; "universal elimination of all international import tariffs and customs barriers" is the opposite of reality; nations raised punitive protective barriers to shelter domestic industries; "immediate introduction of the euro coin" is completely anachronistic; the euro was introduced seventy years later in 1999.
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